Bitcoin’s 15% Rebound Shifts Market Sentiment from Extreme Fear to Neutral

• Bitcoin’s 15.31% rebound to the $60K range has shifted the Greed and Fear Index from extreme fear to neutral.
• Positive inflows into Bitcoin ETFs and significant purchases by MicroStrategy have bolstered market sentiment.
• Ethereum options trading has surged, with over 20,000 contracts targeting $3,000 by December.

In a remarkable turn of events, the crypto market’s greed and fear index has shifted to a neutral stance, moving away from the intense fear experienced earlier. Recent data shows the fear index now stands at “50,” up from “32” yesterday, which indicated fear, and “23” last week, reflecting extreme fear.

This change comes as Bitcoin has bounced back to the $60K price point early today, reaching a daily peak of $60,656. Bitcoin was last in the $60K range on August 28, three weeks ago. During this period, Bitcoin’s price dropped to $52,598 on September 6, contributing to the extreme fear sentiment in the market over the past weeks.

Essentially, Bitcoin has rebounded by 15.31% since that decline, helping to improve market sentiment. At press time, Bitcoin hovers just around $60K as it seeks to defend this newly recaptured threshold.

Bitcoin’s recovery has had a mild impact on the altcoin market, with several top ten altcoins, including Solana, recording modest gains of around 3% in the last 24 hours. Notably, several key events this week have influenced the crypto market’s recovery. This includes positive inflows into spot Bitcoin exchange-traded funds (ETFs).

Read also: Is Bitcoin’s Inactive Supply Index Predicting a Calm Before the Next Surge?

Recent Market Developments Shaping the Recovery

1. Positive Inflows into Bitcoin ETFs: The U.S. Bitcoin spot ETF market saw $263.2 million in net inflows on Friday, marking a reversal from the previous week’s net outflows.

2. Grayscale Bitcoin Trust (GBTC) Inflows: The Grayscale Bitcoin Trust, previously experiencing significant outflows, saw inflows of $6.7 million on Friday.

3. MicroStrategy’s Major Purchase: Bitcoin bull MicroStrategy disclosed an additional purchase of 18,300 BTC, worth over $1.1 billion, bringing its total holdings to 244.8k BTC.

4. Surge in Ethereum Options: Interest in Ethereum options has surged, with over 20,000 contracts bought targeting the $3,000 level by December 27, indicating growing optimism for ETH.

5. Political Developments: Another notable highlight this week was the debate between Donald Trump and Kamala Harris. Although the debate did not address cryptocurrency, Harris’s rising prominence was evident, with current polls giving her just over a 50% chance of becoming the first female President.

6. Inflation Data Impact: This week’s inflation data showed the August Consumer Price Index (CPI) at 2.5%, meeting expectations and raising the chance of a 25 basis point rate cut to 85%.